Answer:
Go up or down by the same amount as Portland’s because both companies have equal net income
Explanation:
Here are the options to this question :
A: Go up twice as much as Hadley’s, but go down only half as much as Portland’s.
B: Go up or down twice as much as Portland’s.
C: Go up or down by the same amount as Portland’s because both companies have equal net income.
D: Go up or down half as much as Portland’s.
Income = Revenue - total costs
total costs = fixed costs + variable cost
For Portland
$1,000,000 - ($700,000 + $100,000) = $200,000
For Hadley :
$1,000,000 - ($400,000 + $400,000) = $200,000
If each company experiences an equal increase or decrease in sales, Hadley's income will increase and decrease as much as Portland's because both companies have equal net income
